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Buy Now, Pay Later and Your Credit Score

Helping you manage your financial health

Buy now, pay later purchases are now appearing on TransUnion credit reports for the first time, meaning lenders will start to be able to see how many buy now, pay later accounts an individual has and how they are managing their payments.

This type of finance lets you defer payment on purchases over a short timeframe – often between one and three months – and it has soared in popularity over recent years.

That’s no surprise, given the ongoing economic uncertainty people have been facing with the pandemic and the rising cost of living. In early 2021 these types of payments accounted for £6.4 billion in the UK[1] and the growth looks set to continue.

The appeal lies in its flexibility. According to TransUnion’s research, the top reason for choosing buy now, pay later is spreading payments out over time, cited by nearly seven in 10 consumers (68%). The fact it’s interest-free is a close second, with 62% choosing buy now, pay later for this reason.

[1] Bain & Company, 2021.

TransUnion’s managing director of consumer interactive, Kelli Fielding, explains:

"It’s important that everyone has as much choice as possible when it comes to finding finance that’s right for their needs, and on terms they can afford.  Including buy now, pay later data in credit reports will help people to better manage their finances and ensure payment behaviour on their buy now, pay later agreements is visible.  That could also improve wider access to credit, supporting financial inclusion."

Kelli Fielding

Supporting responsible lending and increasing access to finance

As it will be visible to other finance providers, this information will further promote responsible lending by creating a more complete picture of a borrower’s financial position, helping lenders to ensure payments are affordable and sustainable.

However, it’s important to note that this won’t affect your credit score, at least not for now, although over time that may change, as more and more information is reported. That said, how you manage these agreements could be taken into account if you apply for credit elsewhere, so it’s really important to keep up with your payments.

Here to support you: Learn more about buy now, pay later

Got questions? We’re here to help. Take a look at some of our frequently asked questions.

Getting to grips with your credit score

We all need as much help as possible during these challenging times. Keeping an eye on your credit report and score could help you access the finance you may need, as well helping you understand and assess any longer-term implications.

Our Consumer Section provides information and tips on how your credit score works and what you need to look out for: